Jack-Up vessels – the future of demand

Jack-up vessels play an important role in the offshore wind sector, providing the stable platforms for the high-precision business that is the installation and maintenance of wind turbines. While a long-standing feature in the oil and gas industry, the first purpose-built jack-up for offshore wind, the MPI Resolution, was delivered in 2003. Since then the European fleet has grown to around 45 vessels.

Over that time the designs have evolved, with the key driver being the increasing size of the wind turbines themselves. The technology has advanced rapidly over the past decade, with turbines increasing in size and moving farther offshore. The next generation is expected to be capable of generating between 10 and 12MW sometime during the early 2020s. Based on the current ratio of nacelle weight to rated capacity, these turbines are likely to have a combined nacelle/rotor mass of 600 – 700 tonnes. Developers are, however, looking at even bigger capacity turbines of 15MW and the lifting weight and height requirements of installation jack-ups will be need to increase to meet this demand.

As the average turbine size has increased, wind farm operators have demanded jack-up vessels with greater deck space for the components, increased lifting capacity and longer legs. However these come at a cost, and with day rates up to €200,000 for the largest vessels, efficiency is everything. Currently it requires on average 3 days to install a turbine, including allowances for transport time and poor weather. This has fallen from 5 days in 2010, but any innovations in equipment or procedures that can reduce that still further are highly sought after.

Changing demand

The peak in demand for vessels from the offshore wind sector was in 2013. Utilisation rates hit a high with 18 construction projects simultaneously underway in the North Sea waters of the UK, the Netherlands, Germany and Belgium. That was followed by a downward trend to 2015 when the market entered a phase of uncertainty regarding demand and utilisation rates fell accordingly. The reliance of the offshore market sector on government subsidies is falling fast but it continues to have a critical impact on the viability or otherwise of many wind farm proposals, and so plays a key role in decision-making. The fluctuations in the prices of fossil fuels over the past few years has brought additional uncertainty.

However, since 2016 conditions have improved. With the numbers of operational wind turbines increasing, operations and maintenance (O&M) activity has created a baseload of activity for the jack-up fleet, while sentiment regarding government commitment to the sector has also improved. Utilisation rates have also been supported by the lack of newbuilds. Since 2015 only two new vessels have been built; the 140m Seajacks Scylla in 2015 and GeoSea’s 90-metre Apollo due for launch later this year.

This apparent scarcity of supply has raised concerns that lack of availability may constrain the offshore industry in the future. However 4C Offshore does not share that view. “With larger turbines being rolled out, the result is that fewer are required,” explains Sue Crothers, Offshore Wind Market Analyst at 4C Offshore. “Also, our expectation is that the development of offshore wind sites will be sufficiently spread out over time for vessel availability not to constrain the market. The burst of activity in 2013 was an anomaly based on conditions at the time and we do not expect it to be repeated as the sector matures.” This prediction that installation activity will continue, but at a lower intensity, is reflected in the fact that more recent designs are offering vessels specialising in either O&M or installation. O&M activity will continue to increase as the number of wind turbines in European waters grows even as the rate of increase slows, and existing vessels are being modified to meet this demand. For O&M, speed and manoeuvrability are as important as deck space, given that they are generally not carrying major components. Meanwhile, demand for installation vessels is also being moderated by the ability of DP-capable heavy lift vessels to carry out the installation of foundations and transition pieces as these do not require the same degree of lifting.

“We expect reasonably firm demand for the premium jack-up vessels up until around 2025,” continues Sue Crothers, “after which O&M will be very much the focus. Looking further ahead we can envisage repowering and decommissioning activity, but this is some way off. However, while we always use known data and advanced mathematical modelling to produce our forecasts, with the many variables that effect energy markets of all types, predictions more than a few years ahead carry a greater degree of uncertainty.”